Mohl steps up lobbying efforts
Andrew Mohl has added his voice to the chorus of fund managers calling on the government to allow equity and property investments to form part of lifetime annuity products.
Mohl, the managing director of AMP Financial Services and Investment and Financial Services Association chairman, told a superannuation symposium at the University of New South Wales the government’s ban on such products would harm the huge number of baby boomers approaching retirement. He said the prohibition could also damage the economy and society as a whole.
Mohl’s comments follow lobbying efforts by IFSA to allow annuities to invest in growth assets which began in earnest a few months ago. Investment in growth assets such as shares and property is currently allowed for allocated pensions and annuities but is not allowed for lifetime annuities.
Mohl told yesterday’s 9th Superannuation Colloquium that the current rules risked placing an unnecessary drain on social security pensions and stalling the Australian share market.
Mohl said the extra returns offered by shares and property over the current mixture of cash and fixed interest would mean less people would be forced to dip into government coffers for pensions.
“Annuities backed by growth assets, such as shares and property, would provide growth to enhance retirement incomes for self-funded retirees for life,” he said.
“Over the long term, that would relieve some of the pressure on governments to provide the same level of pension funding as it would if things remain unchanged.”
Mohl also said the huge movement of money into retirement products such as annuities could dry up the money coming into the Australian share market. This could close the gate on the bull run of the past 10 years, which he said had been caused in part by the huge amount of money flowing into equities from baby boomers saving for their imminent retirement.
“If the baby boomers roll their assets into fixed income backed guaranteed annuities, does the bull run turn into a 30 year rout?” he said.
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